Malawi Stock Exchange-listed Standard Bank plc has announced an increase in profit-after-tax by 50 percent, for the year ended December 31 2020, to K23.7 billion.
The performance reflects resilience of the bank’s business despite a challenging operating environment and subdued economic activity due to the Covid pandemic.
A financial statement co-signed by Standard Bank Chief Executive Philip Madinga and Board Chairperson Ngeyi Kanyongolo shows that the net profit was 50 percent above that for 2019 (K15.9 billion).
This is attributed to growth in net interest income as a result of growth in deposits and its investments and loan book.
“Twenty-twenty as a challenging year due to the impact of the pandemic which affected the economy and operations of most businesses. However, despite the uncertain and challenging operating environment, the group posted a set of strong results,” the statement reads.
The bank notes that overall economic growth in Malawi remained weak due to the Covid pandemic and a volatile political environment that followed the presidential election.
It forecasts that Covid would likely continue to affect business growth despite a good agricultural season which could help offset the negative effects.
At the micro level, Standard Bank notes that the pandemic hampered the growth of its non-interest revenue due to reduced business activity and a 40 percent reduction of fees on internet banking, mobile payments and other related services as a cushion to customers on Covid impact.
In contrast with 2019, and prior to the Covid outbreak, Standard Bank’s non-interest revenue was three percent above 2018 levels due to growth in transaction volumes.
Standard Bank notes that the Covid pandemic will continue to threaten prospects throughout 2021.
“The negative economic effects of the Covid pandemic will likely continue in 2021. Currency pressures are expected to continue largely driven by weak foreign currency inflows which can be partly attributed to the ongoing pandemic,” the statement reads.
Notwithstanding the negative effects of the pandemic, Standard Bank earnings per share grew by 48 percent from K68 in 2019 to K101 in 2020, shows the statement.
On measures to sustain its profitability amidst Covid, Standard Bank says it will continue to focus on digitisation in order to improve customer experience, as well as operational cost management.
“We will continue to drive cost rationalisation by investing for the future, prudent management of risk and liquidity, diversifying balance sheet and maintaining a healthy capital position as the core of what we do,” the statement reads.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.